Deal Includes StrikNET's Toronto-New Jersey and New Jersey-Chicago Microwave Connections

Canada's flagship exchange operator agreed to acquire StrikeNet, a unit of high-frequency trading firm Global Trading Systems LLC, as part of a plan to establish microwave networks linking the Toronto Stock Exchange with major U.S. stock markets to capture business from high-speed traders.

A TMX spokeswoman declined to comment. The transaction is valued at more than $10 million, according to a person familiar with the matter, but the specific price couldn't be learned.

The deal is noteworthy because exchanges so far only have "dabbled through third parties in microwave technology," Mr. Rubenstein said. He believes TMX's acquisition is "a game changer" by broadening access to these high-speed networks.

The deal shows that "speed is being democratized" because exchanges can offer the connections to a wide range of customers willing to pay for the reduced latency, he said.

TMX Group dominates stock-trading activity in Canada and has upgraded its underground fiber-optic network and trading engine to help investors execute trades at increasingly faster speeds. But it lags European and U.S. rivals such as
Nasdaq Stock Market
in the adoption of microwave technology, which transmits buy and sell stock orders and price information more than 30 times faster through the air. TMX risks losing business if it can't offer a comparable service.

TMX originally formed a joint venture with StriketNET to build a microwave connection between Toronto and New Jersey but decided to go a step further and acquire the business outright from Global Trading Systems, Mr. Rubenstein said.

Industry sources say that with microwave networks, TMX aims to attract high-speed traders interested in profiting from fleeting price differences in the stock quotes of companies such as
BlackBerry Ltd.
that are listed on both the Toronto Stock Exchange and the Nasdaq Stock Market or New York Stock Exchange. These sources also suggest that TMX hopes to attract investors that exploit similar prices differences between future contracts listed in the U.S. and the underlying stocks trading in Canada.